MANAGEMENT

Detailed explanation-1: -Provided that gifts not exceeding fifty thousand rupees in value in a financial year by an employer to an employee shall not be treated as supply of goods or services or both.” Employee and the Employer have been proclaimed as related persons for the purpose of CGST/SGST Act, vide Explanation (a) (iii)under Section 15.

Detailed explanation-2: -Gift: Gifts up to Rs. 50, 000 a year from the employer to the employee are exempt under GST. But, gifts amounting to more than Rs. 50, 000 are subject to GST.

Detailed explanation-3: -Hence, if the aggregate value of gifts received during the year exceeds Rs. 50, 000, then total value of all such gifts received during the year will be charged to tax (i.e. the total amount of gift and not the amount in excess of Rs. 50, 000).

Detailed explanation-4: -A benefit of GST is that, gifts which are part of the employment contract between an employer and employee are not taxable under GST. Hence, perquisites such as free housing, gift vouchers, conveyance, membership of clubs, health and fitness centre, etc.

Detailed explanation-5: -Gifts upto a value of Rs 50, 000/-per year by an employer to his employee are outside the ambit of GST. However, gifts of value more than Rs 50, 000/-made without consideration are subject to GST, when made in the course or furtherance of business.